You are currently trying to decide between two cost structures for your business: one that has a greater proportion of short-term fixed costs and another that is more heavily weighted to variable costs. Estimated revenue and cost data for each alternative are as follows:

	Cost Structure
	Alternative #1			Alternative #2
Selling price per unit	$	100		$	100
Variable cost per unit		85			80
Short-term fixed costs/year		10,000			15,000

Required:

1.	What sales volume, in units, is needed for the total costs in each cost-structure alternative to be the same?

2.	Suppose your profit goal for the coming year is 5% of sales (i.e., operating profit sales = 5%). What sales level in units is needed under each alternative to achieve this goal?

3.	Suppose again that your profit goal for the coming year is 5% of sales. What sales volume in dollars is needed under each alternative to achieve this goal?